Techniques Of Payment For International Trade In Saudi Arabia

We start this research by introducing various techniques of payment in international trade in Saudi Arabia. In this regard we reviewed some earlier studies that are relevant to our topic that helped us to avoid repetition and commit errors and come up with new ideas and innovation in the field of international payment.In the second chapter we discussed the role of banking and the mode of payments in international trade in the Kingdom of Saudi Arabia. The chapter also tried to capture the impact of globalization on the Saudi economy and the pattern of international trade. We tried to understand how the changing economics imperatives have changed the movement of capital, goods and services across the borders and why the movement of labor is still restricted? Ansnwers to such questions are traced in the role and function of World Trade Organization (WTO), because WTO itself is a response to the changing economic scenario and international trading system that started in the late 1980's. As the main purpose of WTO is to facilitate the international trade, therefore it was important to understand the functions, goals, missions and procedures for accession to WTO. Therefore, we concluded the chapter by discussing the accession of the Kingdom of Saudi Arabia to WTO, on 11 December 2005.In the same vein, we've talked about banking services, banks themselves, It is a financial institution dealing in money in the sense that it accepts deposits of money from the public to keep them in its custody for safety. So also, it deals in credit, i.e., it creates credit by making advances out of the funds received as deposits to needy people. It thus, functions as a mobiliser of saving in the economy. A bank is, therefore like a reservoir into which flow the savings, the idle surplus money of households and from which loans are given on interest to businessmen and others who need them for investment or productive uses, and there is different types of banks we talked about it, and the crucial role of banks and banking services in economic development of a country, as we talked about the role of international agreements and international trade in banking services and finally we finished talking about the organization of banking services and the international coordination of prudential regulation at global level is increasingly important. There has been a rapid growth of international banking, and financial conglomerates. A number of arguments favor global coordination of prudential regulations.And the third part of the first chapter, we focused more on banks that exist in the Kingdom of Saudi Arabia, their genesis and the significant differences noticed between national and international banking transactions.It is important to emphasis that domestic and international transactions differ in many respects. International transactions involve risks not present in domestic ones. Every element of a commercial transaction is complicated by the realities of cross-border interaction.Furthermore, we will discuss the different types of banks which are specifically the central bank, by far the most important, Saudi Arabian Monetary Agency (SAMA) was established, under two royal decrees issued on (20/4/1952). The first was No. 30/4/1/1046 provided for establishing the Saudi Arabian Monetary Agency, its venue in Jeddah, and opening branches in cities and places as deemed necessary. The second Decree No.30/4/1/1047 provided for the approval of the Charter of the Saudi Arabian Monetary Agency. SAMA began practicing its business in Jeddah on (04/10/1952) And second type:commercial banks. It raises funds by collecting deposits from businesses and consumers via checkable deposits, savings deposits, and time (or term) deposits. It makes loans to businesses and consumers. It also buys corporate bonds and government bonds. Its primary liabilities are deposits and primary assets are loans and bonds.The third chapter which is the main goal of this research contains the methods of payment in international trade in the Kingdom of Saudi Arabia. We have divided this chapter into three sections which are as follows:Traditional methods of payment:they are commonly used in transactions of goods in small quantity. One example is the cash payment, payment via credit card, via check or via open account. We spoke alternately of different methods of payment by listing the pros and cons of each.The second payment method is the documentary collection and we have dedicated an entire section because of its importance, then we speak of the different actors involved in the transactions, the various procedures necessary after the arrival of goods or commodities, such as collection of bills, finally we examined documents relating to documentary collections which are namely the documents against payment and the documents against acceptance. The third method of payment, commonly referred to letter of credit remains one of the methods most used in international trade, and we began talking of the parties involved and then explained in details the different types of letter of credit that exists, and finally we end the section by addressing the advantages and disadvantages of it for the principal parties involved in the process namely the exporter and importer.The last unit is essentially based on a study on a Saudi bank about the methods payment used by the bank. At first glance, we started this unit by performing a detailed study on this bank that has by the way received international recognition from an international institution and the World Bank in 2010. We will essentially talk about the major methods of payment, namely the documentary credit and documentary collection used by the bank and the role both methods play in the import and export.